A building in Germany gets its energy from what’s growing inside it.

Does it make sense to power buildings with algae? That’s the question that arises with the Bio Intelligent Quotient (BIQ) building, in Hamburg, Germany, which has now been operating for more than a year. Residents living inside say they are happy. And the energy performance is great. But what of the economics and practicalities?

We first covered the BIQ last Spring. More recently, we caught up with Jan Wurm, an architect and materials specialist at Arup, one of the companies behind the project. He gave a mostly positive appraisal, though he admits upfront costs are high.

The panels are 0.78 inches thick and cover about 200 square meters in total. They’re filled with algae from the Elbe River and pumped full of carbon dioxide and nutrients. When sunlight hits the 129 “bioreactors,” photosynthesis causes the microorganisms to multiply and give off heat (the water goes to about 40 degrees C). The warmth is then captured for heating water or storing in saline tanks underground, while algae biomass is harvested and dried. It can either be converted to biogas, or used in secondary pharmaceutical and food products.

A prototype building, BIQ is being monitored by the Colt Group, which hopes to market the system, created by Splitterwerk Architects and Arup. Wurm says they’re pleased so far. “It’s producing more heat than we thought,” he says. “We optimized the performance after introducing a new set of pumps at the beginning of the year.” Surveys show the people in the 15 apartments are also content, as well they might be. They have no heating bills and plenty to show off to visitors.

Algae power has the additional advantage of taking CO2 out of the atmosphere, though the amounts involved are not huge. Wurm says each square meter of panel reduces emissions by eight tons a year, which includes two tons sucked up in the green gunk and six tons left unproduced by generating energy using dirtier methods. The building currently reduces overall energy needs by 50%, and Wurm says 100% is achievable. Combined with solar panels to power the pumps and heat exchangers, the building could be completely self-sufficient.

Wurm says we’re likely to see the first full-blown commercial applications on data centers, which of course are particularly energy hungry, and require a lot of cooling. That’s another advantage of algae: it provides natural shading as it absorbs sunlight.

The problem is cost. Wurm estimates total expenses of $2,500 per square meter—a lot more than a typical apartment building. The algae would significantly reduce ongoing energy costs (perhaps get them to zero) but a substantial upfront capital would be necessary to see the long-term benefit.